Yemeni Central Bank to launch 'Aden Financial Center'

Central Bank of Yemen announced on Sunday that it intends to strengthen institutional building and banking mechanism and to start procedures in preparation for establishing Aden Financial Center (AFC).

The announcement, carried by Aden-based Saba News Agency, was uttered by CBY governor Mohammed Zimam on his arrival in Aden, seat of the internationally recognized government of Yemen, after business trip to Riyadh and Amman.

AFC will "host the new headquarters of CBY, commercial banks, insurance companies and exchange firms," said Dr. Zimam noting that the center would be based on "most modern architectural schemes and would use best available security technologies."

In September 2016, Yemeni President Abd Rabbu Hadi issued a controversial decree, moving the CBY headquarters from the national Houthi-held capital of Sana'a to his temporary capital of Aden and appointing new governor in place of Mohammed Bin Hammam.

The decree followed by deteriorating economic situation and further mess in a country already the poorest in Arab World, with two rival central banks in Sana'a and Aden.

Still, the decision left some million civil servants unpaid for more than two years, most residing in the heavily populated north, aggravating the livelihood and human sufferings.

CBY current governor said he and Yemeni ministers of civil service, finance, oil and planning participated in the International Monetary Fund meetings that addressed, from 5 to 12 December, fiscal and monetary policies of Yemeni government.

He added that he discussed with the UN Under-Secretary-General for Humanitarian Affairs, Mark Lowcock, mechanisms of cash aids reception via the CBY and funding needs for next years that made the bank request a new deposit of US$ three billion.

Contacts were made with regional banks to help open corresponding accounts for Yemeni commercial banks, said Zimam. Currently, arrangements are being made for an official visit to Saudi Arabia "to further expand corresponding bank map."

On 20 December, CBY deputy governor, Shokeib Hobaishi, stated that the bank was expecting deposits of US$ 3 billion from Kuwait and United Arab Emirates, a step would contribute to enhancing local currency value, Yemeni rial.

If confirmed, such deposits would be added to more than three billion dollars deposited by Saudi Arabia into the CBY, as well as $200-million grant promised by the Kingdom early last October to shore up the bank's financial position and revive Yemeni economy.

Yemeni rial had lost more than three fourths of its value against US dollar since 2015, leading prices to spike with many Yemenis cannot afford basic commodities, foods in particular.

The Fund said then that 4 years of armed conflict left Yemeni economy weakened, noting that the war was the main cause behind humanitarian crisis in Yemen, which has been divided since 2015 between the Iranian-backed Houthi rebels and legitimate government supported by the Arab Saudi-led coalition.

The Yemeni conflict has left tens of thousands killed, hundreds of thousands injured, and 3 million displaced and pushed the country to the world's worst humanitarian crisis, according to the UN, with more than two thirds of the 28-million population in need for a type of humanitarian aid and immediate protection, including 8.4 million people unsure how to get next meal, and some 2 million children suffering severe shortage of nutrition.